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Nick Serff, a market analyst at City Index in London, said:
'Bank shares in the UK remained downbeat on continued fears that
Standard Chartered's rights issue could spread to other cash calls from
some of the major high street names.'

The updated Basel III rulebook states that banks must increase
their 'core tier 1 capital ratio' - the amount of money they set aside
to cover losses - from 2 per cent to 7 per cent.

At the end of June, Barclays was at 10 per cent but this could
fall to 8.7 per cent by 2011, according to analysts at research house
KBW.

It is thought that the Financial Services Authority - the UK
watchdog - might press ahead with even stricter rules to protect banks
from future crises.

Barclays is said to be examining a debt instrument dubbed a 'step down, step up' bond to ensure it complies with the new rules.

If core tier 1 ratio fell below 7 per cent, bondholders would
take a haircut of as much as 30 per cent, boosting the bank's financial
strength.

Barclays declined to comment. But sources pointed to comments
made recently by bank president Bob Diamond, who succeeds John Varley
as chief executive next year.

'Of course we have a lot of work to do to adapt to the new Basel framework,' said Diamond.

'But from what we know and we can see today, we believe we have
enough equity capital, and it is not our intention to turn to our
shareholders for more.'